1. (a) Purpose. The Federal Transit Act, §16, as amended (49 United States Code §1612), authorizes the Secretary of the United States Department of Transportation to make capital grants or loans for the provision of transportation services meeting the special needs of elderly and disabled persons. The department has been designated by the governor to administer the §16 program.

2. (b) Goal and objectives. The department's goal in administering the §16 program is to promote the availability of professional, cost-effective, efficient, and coordinated passenger transportation services to elderly and disabled persons using the most efficient combination of financial and other resources. To achieve this goal, the objectives of the department are to:

   1. (1) promote the development and maintenance of a network of transportation services for elderly and disabled persons throughout the state, in partnership with local officials;
   2. (2) fully integrate the §16 program with other federal, state, and local resources that are designed to serve similar populations;
   3. (3) improve the efficiency, effectiveness, and safety of §16 transit systems through the provision of technical assistance and the establishment of performance goals and management objectives; and
   4. (4) include private sector operators in the overall plan to provide transportation services for elderly and disabled persons.

3. (c) Department role. The department acts as the designated recipient for all §16 funds appropriated to the state. As the administering agency, the department will:

   1. (1) develop application materials and disseminate information to prospective applicants and other interested parties;
   2. (2) develop evaluation criteria and select projects for funding, in concert with other entities that have prescribed roles in this process as outlined in subsection (i) of this section;
   3. (3) prepare the state's annual program of projects and funding application and submit that material to the Federal Transit Administration for approval;
   4. (4) negotiate and execute contracts with local §16 recipients that include performance goals and management objectives for those recipients;
   5. (5) prepare requests for federal reimbursement, and process payment requests from §16 recipients;
   6. (6) monitor and evaluate the progress of ongoing transportation operations, including compliance with federal regulations and coordination of services; and
   7. (7) provide technical assistance to §16 recipients to aid them in improving and coordinating transit services.
4. (d) Eligible recipients. Private, nonprofit organizations or associations are eligible to receive §16 funds through the department. Public bodies, as selected in subsection (i) of this section, or any public body that certifies to the selecting entity that nonprofit organizations in the area are not readily available to carry out the services, may also receive §16 funds through the department.

5. (e) Eligible assistance categories. The following categories of expenses are eligible for federal reimbursement under the §16 program.

   1. (1) State administrative expenses. The department will use up to 10% of the annual federal program apportionment to defray its expenses incurred for the administration of the §16 program. The department must provide a 20% match for any federal administrative monies.

   2. (2) Capital expenses.

      1. (A) Eligible recipients, as defined in subsection (d) of this section, may use program funds for the purchase of capital items. Eligible items include, but are not limited to:

         1. (i) buses;
         2. (ii) vans or other paratransit vehicles;
         3. (iii) radios and communication equipment;;
         4. (iv) vehicle shelters;
         5. (v) wheelchair lifts and restraints;
         6. (vi) vehicle rehabilitation;
         7. (vii) microcomputer hardware and software;
         8. (viii) other durable goods such as spare parts with a unit cost over $300 and a useful life of more than one year;
         9. (ix) initial equipment installation costs;
         10. (x) vehicle procurement, testing, inspection, and acceptance costs;
         11. (xi) the lease of equipment, provided the local recipient, with the concurrence of the department, determines a lease is more cost effective than the purchase of equipment after considering management efficiency, availability of equipment, staffing capabilities and guidelines on capital leases as contained in 49 CFR Part 639; and
         12. (xii) the acquisition of transportation services under a contract, lease, or other arrangement.
      2. (B) Based on funding availability, federal funds may be used to defray up to 80% of the cost of eligible capital expenditures. The federal share may increase to up to 90% for incremental costs related to compliance with the Clean Air Act or the Americans with Disabilities Act of 1990. Eligibility standards for the higher federal share are defined in FTA Circular 9070.1C. The local recipient must provide a 20% or 10% cash match at the time the equipment is delivered or the services are received.
6. (f) Local share requirements. The local share required under subsection (e)(2) of this section must be provided from sources other than federal funds except when authorized by federal law.

7. (g) Funding distribution.

   1. (1) Formula basis. The balance of the annual §16 federal apportionment, after the state administrative expenses described in subsection (e)(1) of this section are set aside, will be allocated to department districts on a formula basis as follows. For urbanized areas of 200,000 population or greater, suballocations will be made from the appropriate district allocations provided under subparagraph (B) of this paragraph to the designated metropolitan planning organization.

      1. (A) 25% of the total available funds will be distributed equally among the department districts.

      2. (B) 75% of the total available funds will be allocated as follows.

         1. (i) The elderly and disabled population of each department district will be calculated by using the latest census figures for counties available from the state data center.
         2. (ii) Each department district's subtotal of elderly and disabled population will then be divided by the state total of such population to determine the district's formula allocation.

   2. (2) Allocation.

      1. (A) Preliminary formula allocations for the next fiscal year will be announced by the department no later than January 1.
      2. (B) Final allocations will be announced within 30 days of the federal apportionment to the state.
      3. (C) Upon completion of the project selection procedures described in subsection (i) of this section, if a department district or designated metropolitan planning organization does not need the entire allocation, the balance will be redistributed among the other department districts using the formula outlined in paragraph (1)(B) of this subsection.
8. (h) Application requirements. A prospective applicant must submit an application for §16 grant funds to the appropriate department district office, on the forms and at the time specified by the department. The application shall document the need and demand for passenger transportation services for elderly and disabled persons.

9. (i) Project selection. In urbanized areas of 200,000 population or greater, applications from individual local agencies, as described in subsection (h) of this section, will be provided by the department to the designated metropolitan planning organization for project selection as described in paragraph (2) of this subsection. In all other areas, the department district office will review the applications and consult with all local parties, including any existing metropolitan planning organizations. Up to 10% of a district annual allocation or suballocation may be reserved for contingencies or unidentified projects in keeping with the Category C allowances in the program of projects which is described in subsection (j) of this section. Project selection will be as follows.

   1. (1) In nonurbanized areas and in urbanized areas under 200,000 population, the department district office will select projects in priority order, including up to five reserve projects should additional funding be made available, based on the following criteria:

      1. (A) the demonstrated need for capital equipment, examples of which include, but are not limited to, a needs assessment which documents the demand for new services, a vehicle inventory which establishes the need for replacement of older equipment, dispatcher logs which document requests for service that cannot be met with existing equipment, and purchase of service contracts which substantiate the need for additional vehicles;
      2. (B) the applicant's financial and managerial capability to maintain and operate the equipment, examples of which include, but are not limited to, audited financial statements and review letters from grantor agencies;
      3. (C) the applicant's efforts to coordinate services and related activities with other local entities, examples of which include, but are not limited to, contracts that outline purchase of service agreements, shared maintenance or dispatching functions, and joint training initiatives; and
      4. (D) evidence of local support for the proposal, examples of which include, but are not limited to, resolutions by local governing bodies and endorsement letters from other organizations or individuals.
   2. (2) In urbanized areas of 200,000 population or greater, the designated metropolitan planning organization will make the final project selection, including up to five reserve projects should additional funding be made available, based on criteria adopted by that metropolitan planning organization. The metropolitan planning organization will then notify the department of the projects selected for funding in priority order and return the applications to the appropriate department district office. The metropolitan planning organization may choose to adopt local procedures. In those instances, it shall be the responsibility of the metropolitan planning organization to advise prospective applicants of the procedures necessary to be considered for project funding in that urbanized area.
   3. (3) Upon receipt of the applications selected for funding from the department district offices, the division director, or his or her designee, will review all funding requests for completeness and compliance with all statutory and program administrative requirements. The department will negotiate a contract with the selected local entities and organizations to implement the projects selected for funding.
10. (j) Program of projects. Upon completion of the evaluation and selection of projects, the department will prepare a program of projects as described in FTA Circular 9070.1C. Projects listed in category A of the program of projects are those which have met all statutory and administrative requirements for project approval and for which contracts will be issued upon receipt of federal grant approval. A selected project that is not yet complete will be listed in category B and a contract will not be issued until all requirements are met. Up to 10% of the annual federal apportionment may be listed as a program reserve in category C. Projects advance to the next category in the program until all listings are in category A.
11. (k) Vehicle leasing. Vehicles acquired under the §16 program may be leased to other entities such as local public bodies or agencies, other private non-profit agencies, or private for-profit operators. The lessee shall operate the vehicles on behalf of the §16 recipient and provide the transportation services as described in the original grant application.
12. (l) Meal delivery. Section 16 program contractors may coordinate and assist in providing meal delivery services for homebound persons on a regular basis if such delivery services do not conflict with the provision of transit services or result in a reduction of service to transit passengers. Section 16 funds may not be used to purchase special vehicles to be used solely for meal delivery or to purchase specialized equipment such as racks or heating or refrigeration units related to meal delivery.

Source Note:The provisions of this §31.31 adopted to be effective August 14, 1989, 14 TexReg 3704; amended to be effective July 20, 1992, 17 TexReg 4891; amended to be effective November 21, 1994, 19 TexReg 8776.